The Chinese government is expected to spend about 200 billion yuan ($30.10 billion) on  water conservation projects in 2011, a tenth more than in  2010, the state-run China Daily reported on Saturday.

Priority will be given to improving irrigation to ensure  grain security and projects to combat drought and floods, the  newspaper said.

It cited Water Resources Minister Chen Lei as telling a  government meeting that some of the investment would come from  a 10 percent levy on income earned from the leasing of land. The newspaper did not elaborate.

Other funds would go towards renovating water supply  infrastructure for main agriculture regions and ensuring safe  drinking water for 60 million rural people, the newspaper added. 

"Over the next 10 years, Chen said he hopes the country  can double its current average annual investment in water  conservation construction," it said.

The government has invested about 700 billion yuan on  water conservation over the past five years, the newspaper said.

Chen Xiwen, director of the central government's rural work leading group who advises top leaders on rural policy,  said the government would specifically target water  conservation next year because of worry about grain  production, it said.

While grain production will rise to 546.4 million tonnes  this year, up by 15.6 million tonnes on last year, there are  worries about next year's harvest because of natural  disasters, which could push up food prices, Chen Xiwen added.

The government is paying close attention to the cost of  food after prices rose nearly 12 percent in the year to  November, leading overall consumer inflation to a 28-month  high of 5.1 percent.

"We have to accelerate the construction of water conservation facilities as one of the key infrastructures the  country needs to secure increasing grain production. We must address issues arising from the country's rapid urbanisation,  which has consumed land that used to be used for farming," he  said.

Chen Xiwen said this month water shortages and the encroachment of urban development on rural land posed  challenges for China to extend increases in grain output after  seven years of growth. – Reuters